A Manufacturer’s Guide to Contractor Loyalty Programs
What does it take to become the building products manufacturer of choice for contractors?
Offering a contractor loyalty program can help get the building products you make into more hands, more often. A Principia survey of more than 1,100 contractors found that if the customer was in just one manufacturer loyalty program involving a product category, the program’s brand was likely to get 62% of the contractor’s total spend in that category. What’s more, a manufacturer’s share of the customer’s wallet grows faster within the program—and that enrollees' revenues grew faster than their peers.
Despite these clear benefits, many manufacturers fail to fully reach and engage the contractor audience. Among the surveyed contractors, only a percentage said they participated in manufacturer loyalty programs. The breakdown varied by category:
Earning Loyalty From Existing Customers
Contractors, remodelers and builders have a job to get done. They’re looking for brands they can trust with their business. The good news? Manufacturers that invest in contractor loyalty programs avoid competitive price wars.
Instead, savvy manufacturers engage their existing customer base. Rewarding repeat purchases with exclusive offers through a contractor incentive program creates benefits beyond boosting sales volume.
Manufacturers that build targeted communication channels through a branded platform stand to gain valuable downstream relationships. This direct contact with customers is critical. It minimizes the complexity of a B2B2C relationship, allowing you to share relevant, personalized messages with customers at various stages in the purchasing lifecycle.
7 Proven Strategies for Effective Contractor Loyalty Programs
When manufacturers build well-structured contractor incentive programs, they develop a “loyalty loop”— an ongoing cycle of retrigger, repurchase and re-consumption experiences.
Properly executed contractor loyalty program strategies create impact beyond customer retention. The cadence of program benefits, positive customer experiences and award redemption can turn fair-weather consumers into loyal promoters. Winning word of mouth is key.
Employ these proven strategies to run a contractor loyalty program that helps you stand out from the competition.
1. Think Strategically About Recruitment
Before you start recruiting contractors, define your ideal partner profile. Identifying the right partners for your program will streamline your recruitment efforts. Then, tap into sales reps and distributors to start building a list of targets. Consider purchasing a list or appending missing data to build a stronger database. Remember, recruitment is not a one-time activity. It’s important to have a strong ongoing recruitment strategy.
When building a contact list, strive for quantity over quality and keep compliance issues in mind when collecting personal information. Scrub lists regularly, removing outdated or invalid email addresses. These updates improve deliverability and help your organization achieve accurate engagement rates. A well-maintained list enables brands to target segments with relevant communications.
2. Develop a Comprehensive Communications Launch Plan
Lead with a hard-to-ignore value proposition. If contractors are going to take an extra step to sign up for a loyalty program, they need to know what’s in it for them. Grab your audience’s attention by communicating program benefits before they log into the platform. A strong hook will convince them participating is worth their effort.
Weave signup opportunities into on-site promotions by including a QR code on point-of-purchase displays, product packaging or coupons you can share with distributors. Promote at trade shows. Partner with the sales team to encourage customers to register with your platform and incorporate call to actions on your website and social channels to advertise the program. Maintain subscribers by giving them the first look at innovations and exclusive offers.
Offer an initial incentive they can’t pass up. A richer payout up front will draw them in and deliver a positive ROI. Similarly, strategic follow-up communications through the incentive platform encourage repeat purchases and help build loyalty. For example, promoting a $75 bonus after a first purchase and double points during the first 60 days offers immediate benefits and a reason to purchase again soon.
3. Cultivate Dealer & Distributor Relationships
Educate the dealer audience on the benefits brand loyalty brings to their business. When contractors seek out your product in their stores, those trips often include additional purchases. Participation in a contractor loyalty program pulls them in more often and results in higher distributor sales.
Prominently placing point-of-purchase materials is a win-win. Incenting this audience helps sweeten the deal for counter sales reps who are key to carrying out your brand message. They’re especially critical in the early stages of an incentive program and rewarding them gives them skin in the game.
4. Design a Simple Earning Structure
Segment your audiences by participant types and tiers. Launch with a core strategy that can be expanded to additional audiences. Don’t talk in mystery numbers. Instead, set clear thresholds with increasing reward and recognition opportunities in each tier. For example, raise the payout rate as contractors advance. Consider saving lucrative benefits until a certain level is reached while offering promotions that encourage contractors at lower levels to continue to progress.
Include a variety of motivating awards that appeal to multiple channel partner personas. Make it easy for participants to understand what actions trigger awards. Reward for desired behaviors beyond purchases and sales. Those activities might include lead generation, training completion, social sharing, submitting product reviews, etc.
5. Add Additional Value-Add Benefits Into Your Program
Rewarding with branded swag is no longer enough to encourage engagement, as contractors demand more from loyalty programs. (Incorporating merch into the registration process as an instant bonus can be helpful, though. Contractors appreciate service vehicle decals, hard hat stickers and other practical items that are highly visible on job sites.)
Include resources for personal and professional development into your offerings. Develop partner or co-branded marketing materials. If a manufacturer receives customer leads, consider sharing those with contractors. Integrate the organization’s learning management system with the channel partner incentive platform to turn trainings into earning opportunities. Think beyond content that educates on your products and turn your learning management system (LMS) into a channel where they can also find critical information on topics that matter to them, like wealth management and business transition planning.
6. Utilize On-the-Go Technology
Contractors rarely work from a desk. Reach them where they are and develop mobile-friendly platforms and applications to reduce participation barriers. Long claim forms deter engagement while online claims reimbursement technology and phone-based photo uploads allow for easier participation with an on-the-go audience. This technology accelerates the process for contractors, better tying behaviors to awards. It also reduces the administrative burden of running a scaled program for your team.
7. Maintain Engagement With Personalized Offers
Whether it’s a contractor’s first purchase or 500th, personalized engagement is all about meeting them on their journey. When brands take time during the program design phase to map out participant touchpoints and how they will experience each tier, the communication is poised to successfully motivate an audience.
Sometimes contractors need a nudge to take advantage of the benefits of your loyalty program. Has it been 60 days since you’ve seen a purchase from your contractor? Send a text promotion to activate a personalized offer. Is a participant close to hitting the next threshold? Encourage them with a message that outlines the additional benefits and next steps needed to unlock them.
Recruitment & Measurement in Contractor Incentive Programs
Contractor loyalty programs require continuous efforts to attract and engage participants. Measure and analyze program data to understand what’s working well and which enhancements will mean the most to your contractor audience. Tweak the earning structure based on what you learn. Are certain product categories or regions lagging? Implement a SPIFF. Optimize your program spend by reallocating any remaining incentive program funds around priority areas to see the best results. Build out a feedback loop that brings in voice of the contractor and use qualitative insights to informs program evolution.
Effective contractor loyalty programs employ a variety of strategies as part of a comprehensive plan. Monitoring progress is easier when the technology supports an integrated solution.